Reference no: EM133676417

Management Accounting

Your Task

Form groups of 2 or 3 students (maximum) and identify a group leader

The group leader must email your lecturer with the names and student numbers of all group members by Week 4

Students who have difficulty forming groups must inform their lecturer by Week 4. Your lecturer will assist you in creating a group.

Answer the questions included in the Assessment 1 Details document, which will be available in class during Workshop 5.

This case study must be attempted as a group, with all team members actively participating.

Assessment Details Part A:

Bluey Backpacks Pty Ltd has estimated that budgeted production and sales of its backpacks during the coming year will be units at an average price of $ per unit. Variable manufacturing costs are estimated to be $ per unit, and the variable marketing costs $ per unit sold. Fixed costs are expected to amount to $ for manufacturing and $ for marketing. There will be no beginning or ending work in progress.
( Ignore income taxes)

Required:
a. Calculate the company's break even point in units and sales dollars for the coming year.
b. Calculate the number of sales units required to earn a net profit of $ during the coming year.
c. If the company's variable manufacturing costs are % higher than budgeted, calculate the break even point in sales dollars.
d. Calculate the break even point in units if fixed manufacturing costs drop to $

Part A: Hospital Data:

a. Use the high-low method to estimate the behaviour of the clinic's administrative costs based on patient load within the relevant range.
Use an equation to express the results of this estimation method.
b. Use the high-low method to estimate the behaviour of the clinic's administrative costs based on number of emergency procedures within the relevant range.

Use an equation to express the results of this estimation method.

Part B:
Script Ltd manufactures and sells ink pens.

The following data is available for preparing budgets for the second 2 quarters of 2024:
1. Sales:

2. Direct materials:
3. Desired inventory levels:
4. Direct labour: Direct labour is minutes per pen at an hourly rate of per hour.
5. Manufacturing overhead budget shows expected costs to be of direct labour cost.

Required:
(a) Prepare the Sales Budget for each Quarter 3 and 4
(b) Prepare the Production Budget for each Quarter 3 and 4
(c) Prepare the Direct Materials budget for each Quarter 3 and 4 for Plastic and Ink materials.
(d) Prepare the Direct Labour Budget for each Quarter 3 and 4.
(e) Prepare the Manufacturing Overhead Budget for each Quarter 3 and 4

Part C:

Eclipse Ltd, which uses a job costing system, had two jobs in process at the start of the year:Job number 64Job number 65The following information is available:(a) The company applies manufacturing overhead on the basis of machine hours. Budgeted overhead and machine activity for the year were anticipated to be $ and hours, respectively.(b) The company worked on four jobs during the first quarter (i.e. from 1 January to 31 March). Direct materials used, direct labour incurred, and machine hours consumed were as shown in the following table.

(c) Manufacturing overhead during the first quarter included:

(d) Eclipse Ltd completed job number 64 and job number 65.

(e) Job number 65 was sold on credit, producing a profit of for the firm.

Required:

1 Determine the company's predetermined overhead rate.

2 Prepare job cost sheets for the first quarter to record all jobs from 64 to 67, with the application of manufacturing overhead to production.

3 With the completion of job numbers 64 and 65, and sale of job number 65, determine:

a. The cost of the jobs still in production as of March 31.
b. The total cost of jobs sold
c. The sale price of Job 65

4 How much was Manufacturing Overhead over or under-applied? Why did this occur?